JPMorgan Predicts a Bitcoin Decline Following the Halving Event

Crypto News– According to a research report from Wall Street giant JPMorgan on Wednesday, the bitcoin (BTC) price is expected to decline following the reward halving event, which occurs approximately every four years and is set to take place around April 19-20.

JPMorgan Predicts a Bitcoin Decline Following the Halving Event

The bank attributes this potential downturn to the fact that the market is currently in overbought conditions, as indicated by its analysis of open interest in bitcoin futures. Additionally, despite the cryptocurrency’s price hovering around $61,200, JPMorgan notes that it remains above its volatility-adjusted comparison with gold, which places it at $45,000, as well as its projected production cost of $42,000 post-halving. Historically, the bitcoin production cost has served as a lower boundary for BTC prices.

JPMorgan also highlights that venture-capital funding remains subdued despite the recent resurgence in the crypto market. The most significant impact of the halving is expected to be felt by mining companies.

As unprofitable bitcoin miners exit the network, we anticipate a significant drop in hashrate and consolidation among bitcoin miners, with publicly-listed bitcoin miners capturing the largest share.

Nikolaos Panigirtzoglou

Additionally, they anticipate that following the halving event, some bitcoin mining firms may seek to diversify into regions with lower energy costs, such as Latin America or Africa, in order to deploy their inefficient mining rigs and extract salvage value from them, which would otherwise remain idle.